but in the last 100 years we lagged behind because we were discriminated against. we knew it all along and now getting the credit -- >> greg: that s that written bay woman? >> kimberly: no. james flynn. hello a man. figure it out. that's it. bye. >> bret: a high takes game of chick within the tax bill and the u.s. economy, dangling over a fiscal cliff. this is "special report." ♪ ♪ >> bret: good evening. ominous story today by a tough senate democrat has average americans asking whether the tax bills will surge by hundreds, maybe thousands of dollars next year. it has to do with the political tug of war over whether taxes should go up on families making more than $250,000 annually.

chief congressional correspondent mike emanuel tells out it has for nearly everyone. >> reporter: they're taking the country over fiscal cliff if the republicans won't increase the tax increases. that translates to allowing $600 billion in tax hike and spending cut to take effect next year, which the head of the democratic snarl campaign committee laid out today. >> if we can't get a good deal, a balanced deal that calls on the wealthy to pay their fair share, thenly continue the debate to 2013, rather than lock in a long-term deal this year to throw middle class families under the bus. >> reporter: republican leaders worry it would throw the economy back to a recession and says this shows that democrats would do anything to get their way. >> make no mistake. if the democrats are proposing today is entirely avoidable high stakes game of chicken. with a single minded goal of

taking more money from those who earn it for government to waste. >> reporter: in a "wall street journal" op-ed with the headline "the tax cliff is a growth killer" art laffer wrote, "the united states faces an economic collapse thanks to massive tax increases on january 1 and continue deficit spending for years on end." >> that is about 3-1/3% of the whole u.s. economy. that is something like 20% of all tax revenues. that is a massive tax increase. when you have tax increases like that, that precipitates a collapse. >> reporter: the house is preparing to vote on extending all of the bush tax cuts while the white house, majority leader harry reid are supporting $272 billion plan to extend cuts for individuals making up to $200,000. and couples earning up to $250,000. president obama threatened to veto for the top 2% and called on congress to pass extension for everybody else. >> skip unnecessary drama, the

needless plays and all the partisan posturing and just do the right thing for people who sent us here to serve. >> today, senator murray suggested if the bush tax cuts expire, then any deal after that would be a tax cut for pro pose sal. and free republicans from the no new taxes penal. the founder of the pledge grover norquist says he expects republicans in the house and senate to continue to abide by it, even if mr. obama is re-elected. bret? >> bret: mike emanuel live on the hill. thank you. mitt romney says president obama is attacking his business record because the president's record is so weak. the attacks have had the republican on the defensive. but tonight, chief washington correspondent james rosen tells us the governor is vowing to start playing offense. >> i think what people accuse you of a crime, you have every reason to go after it pretty hard. i'm going to continue going after him. >> speaking of growing clom more from within the party he toughen up and start throwing punchs on the come pain trail,

mitt romney released a web video accusing obama of crass cronyism, rewarding donors with stimulus funds and government contract and jobs. >> this a tough time for people of america. if you are a campaign contributor to obama your business may get millions of dollars in cash from the got. i thin -- cash from the governm. it's wrong and stinks to high heaven. >> they cited two ill-fated loans worth $5 million that the state of massachusetts gave when romney was governor to companies made by donors to romney gubernatorial campaign. >> release tax returns tomorrow. it's crazy. >> despite friendly fire like this. romney held fast to his plan to release two years worth of tax returns. instead channeled mr. obama to release -- instead challenged mr. obama to release "fast and furious" document he invoked executive privilege to withhold from congress last month. after buying chili-flavored

cheese dogs he had his first town hall. campaigntility, distributed on first come, first serve basis but all of the questions were friendly, including query about his favorite girl scout cookie. mr. obama scouted new report by the economic professor who concluded romney proposal to exempt the income of multinational corporation earn overseas, territorial system of the kind favored by some of the president's own advisors would lead to creation of 800,000 jobs. >> there is only one problem. the jobs wouldn't be in america. it shouldn't be a surprise, governor romney's experience is investing in what we were called pioneers of the business of outsourcing. i want to give tax breaks to businesses that are investing in ohio, in cincinnati and the county. >> with the campaign turning

so nasty so early, allegation of lies, felony, cronyism and payoff, there is almost no place to go but up. that path will take both to the saddleback church in southern california, where dr. rick warren, author of the "purpose-driven life" will reprieve to t event he hosted with senator obama and mccain, the civil chat about the role that faith plays in their lives. bret? >> bret: thank you. president obama is challenging the notion that people generally considered to have made it on their own really did it on their own without government help. we look at what he is saying about the concept of individual success. >> even as the president visited ohio for 24th time, a remark he made friday in a speech in roanoke continued to draw criticism. >> if someone invests in roads and bridges if you got a business you didn't build that.

somebody else made it happen. internet didn't get invented on its own. government research created the internet so companies could make money off the internet. >> romney spokeswoman called mr. obama's comment, "insulting to the hardworking entrepreneurs, small business owners and job creators who are the backbone of our economy." romney supporters says it's a misunderstanding of the economy. >> i think he thinks the government creates opportunity upon which people seize. that is not the way it works. free market determined by individual. making decisions for themselves. >> aides say what obama meant, small business people didn't build are the roads, bridges and internet to connect to us them. campaign spokesman said those are investments we make not as individuals but americans and the nation as a whole benefits from them. the president pointed to people we meet along the way who inspire us. >> somebody along the line gave you some help. there was a great teacher

somewhere in your life. somebody helped to create this system that allowous to thrive. >> the internet began as defense project. economic impact was unforeseen. plastic and others that grew out of our decision to go to the moon. they suggest the fundamental ideological difference with mr. obama thinking. >> the american people want craid to grave government care or control their own destiny. >> the obama camp, that is a false choice. but romney's team contends coming down more on the side of government is why the economy hasn't produced more jobs. bret? >> live on the north lawn. wendell goler. thank you. brit hume is here tonight with thoughts on what all of this says about the president's thinking. good evening. >> hi, bret. is it fair to say that we know more tonight than we ever have about the president's view of business and the economy. hi assertion "if you've got a

business, you didn't build that. somebody else made it happen." he wasn't talking about god. he was talking about government. here is a man that believe not just that the government provided framework of road and bridges, defense, law enforcement helps the private sector, he believes these things are the nerve center, the driving force. more important than any individual talent, enterprise or initiative. as he put it, there are a lot of smart people out there. diligence, there are hardworking people out there. success, you didn't get there on your own. this is a view that successful businessmen and women are the ones that did better at taking advantage of the benefit that government bestowed. he thinks they should be glad to pay share of taxes than they do. he calls it giving back. as if the government conferred on them all they have and shouldn't mind returning more of it to the where they came from. it explains why so much stimulus money was spent to protect government jobs and why legislation on healthcare and financial reform involved

extending the reach and power of you guessed it, government. >> bret: how discuss it play politically? >> bad with the entrepreneur and business people in general. the question is how many of the people will ever hear about it? this story about the saturday night comment we play it on fox news and discuss it. a few other media outlets have but oop few. it may just disappear. >> bret: unless it's used in an ad. >> we'll see what the romney people are prepared to do with it. the response they had today i thought was mild. >> bret: thank you. retail sales fell a half percentage point in june. that is the third straight monthly decline. that sent the dow down. the s&p 500 fell 3. nasdaq dropped 11-1/2. international monetary fund lowered the outlook for global growth over the next two years. imf predicts annual expansion of 3 panth% down from 3.6%

because of europe's financial crisis and slowdowns in china and india. the fight over the austerity measures in spain has split battling each other. it happened today in madrid. plain-clothes cop with firefighters and civil servants clashed with riot police. demonstrators were trying to march on parliament to protest as will of one of their 14 annual paychecks, due to budget cuts. is the attorney general using a double standard when it comes to voting rights? that is later in the grapevine. up next, shots fires in the waters near iran. we will tell you who is shooting at who. the latest rhetorical shot at iran from the secretary of state.

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helps defend against digestive issues with three strains of good bacteria. hit me! [ female announcer ] live the regular life. phillips'. >> bret: tension rising in the gulf. navy oil tanker fireded on a small ves sal after it did not back off. there are casualties. jennifer griffin on what happened. >> u.s. navy officials say the

u.s.ship flashed warning shots before using lethal force against the small pleasure craft, as it approached the oil tanker for a second time. the small boat turned and crossed back toward the rapahanick. one person was killed. three others was injured. the navy put out a statement -- the u.s. crew repeatedly attempted to warn the operator osto turn away from the deliberate approach. when the efforts failed to deter a approaching vessel, the security team fired rounds from the 50-caliber machine gun. the ship fired on ted was 50-foot uae vessel with four passengers on board, two from the united arab emirates who were uninjured. retired vice admiral has been swarmed by the iranian fast

boats in the persian gulf. >> we train the sailors if a vessel is approaching you close aboard you give it warning. you give it signals like search lights. light off flares. >> navy rule changed after the cole was attacked by boat packed by explosives and killing 17 u.s. sailors. monday's incident occurred off the coast of the united arab emirates near dubai from the strait of hormuz. the pentagon announced this morning it would send the john c. stennis to the region four months ahead of schedule. >> bret: i understand there was a hard line taken against iran from secretary clin top after she ended a nine-day tour in israel meeting with egypt and the muslim brotherhood spokesperson. what can you tell us about that? >> it was third on secretary clinton agenda. she spoke about egypt new

president and concerns about iran. clinton described the nuclear proposals as the nonstarters and said the u.s. and israel are on the same page right now. >> iran's leaders still have the opportunity to make the right decision. the choice is ultimately iran. our own choice is clear. we will use all elements of american power to prevent iran from obtaining a nuclear weapon. >> in egypt, protest resulted in tomatoes and shoes thrown at clin top's convoy protes protesters. >> bret: thank you. the law of the sea treaty may be going under permanently. republican senators rob portman and kelly aiot will oppose it to give opponents enough vote to stop ratification. majority leader harry reid led the effort to adopt the treaty. proponents say it would be a boom to u.s. business. those who oppose it contend it

would undermine u.s. sovereignty. still ahead -- your tax free internet shopping could be a thing of the past. but first, karl rove and joe trippi with a look at where the presidential race stands right now. this is new york state. we built the first railway, the first trade route to the west, the greatest empires. then, some said, we lost our edge. well today, there's a new new york state. one that's working to attract businesses and create jobs. a place where innovation meets determination... and businesses lead the world. the new new york works for business. find out how it can work for yours at thenewny.com.

>> bret: welcome back. we're going to talk for a few minutes about the magic number. 270. 270 electoral votes to win the presidency. bring back former bush senior aid visor karl rove and democratic strategist joe trippi to tell us the latest on the numbers. thank you for being here. as you take a look at the latest map. we can lay it out for you here. you can see the info on the key. red states, romney. blue states, president obama. then the pinkish is lean romney. light blue is lean obama.

the yellow is tossup. those are states within the margin of error. those are tossup states. this is all based on polls from the last 30 days. we have been meeting every couple of weeks. karl, what has changed since the last time we talked? >> we haven't had a lot of polling because we had the fourth of july holiday intervene and pollsters don't like to poll. we are likely to see more in the weeks ahead. only two states changed, michigan and new hampshire. both went from lean obama, based on recent polls to tossup states. there were changes in a variety of other states but none of them changed the status of them. two states representing 20 electoral college votes. michigan with 16. new hampshire with four went in the tossup category. >> bret: other changes happened. a number of categories of states changed. >> yeah. three tossup states moved toward obama. by one point. three romney states got stronger for romney by anywhere between three points

and ten points. three states that were obama states got better for romney. again, didn't change the status. three obama states got better for obama. >> bret: six and six. >> the bigger changes happened in the states that were safe for romney. the second largest set of shifts occurred in states that were safe for obama. but the only ones that mattered were the three states, michigan and new hampshire where the status changed. >> bret: what are you seeing on the map? particularly, where the obama campaign is deploying money to advertise? >> they start putting money in new hampshire last week. in the tv ads there. they have added money in pennsylvania this week. which sort of, when you look at the new hampshire move to tossup, makes sense that they would be doing that. the interesting thing is they haven't put money in michigan yet. michigan, if it moves the tossup as it's moved, a big,

big shift. that is a state, we haven't been looking at it. lean obama. because of romney opposition, auto bail-out, they haven't done that. if they have to put money there, too. it will start to stretch some of the resources. >> bret: it's important to point out that this is based on 30-day polls. so some of the states there are not a lot of polls. they are based on old polling. >> karl and i talked about it. we are begging for somebody to do a poll in south carolina and texas and south dakota to put those safely in romney territory, which is where they should belong. >> bret: right. texas lean romney is not really -- >> we have several month of polls. south carolina, the last poll is december. please, somebody, some reputable media organization in south dakota, south carolina and texas run a poll to settle it for the rest of the campaign. >> it means the electoral vote

is tighter than we are showing it. we show this with an abundance of caution to keep some of the states that are tossup from long ago polling that aren't today. i don't expect them to be. >> he touched on important point. if you're the incumbent you try to narrow the field of places you play defense. if you are the challenger, you want to expand the field as you go forward on places you can play offense. for example, in 2000 we were playing offense in west virginia. a state that bob dole lost by 16 points in -- excuse me, in 196. we wanted to expand the battlefield. what is happening to president obama is they originally were running television advertising in seven states. they added an eighth state. now they are up to nine states. it may be that michigan, if the numbers in michigan are real, they ought to be advertising if ten states. starting to stretch their financial resources. between may 1, roughly, and the end of july, president

obama and the outside allies will spend $116 million on television, based on the buys they have placed today. and romney and his outside allies will spend $150 million. obama campaign will spend $115 million out -- excuse me. $100 million out of its own war chest. romney campaign will spend $40 million. difference will be made up by outside allies, and that is starting to stretch, the financial resources of president obama. >> i agree with karl. i think what, i think the obama campaign was hoping by now it would be slinking to four or five-state fight. and instead of that, it's broadened out. if it broadens out from michigan, then i think they planned on shutting down some get out the vote, some field organizations, shutting down the number of states they were buying spots. and instead, it's not shrinking. it's growing. that presents -- >> bret: i want to ask one thing. this growing conservative

voice out there that seems to be saying to the romney campaign, go on the offense. you had -- about the bain attacks and the commercial that obama campaign is runnin running, concern in the republican ranks. mark levin says attention romney campaign staff. you need to go on the offense. forget apologies. take the mitts off. president obama is playing the brass knuckle rule of chicago politics. rather than call for apology, romney needs to break a bottle on the bar and start fighting back. is this an issue? >> they are fighting back. but the conundrum, obama wants them to fight back in the way they are attacking and he wants them in the gutter with them. when they go to refute this, they need to flip this to a higher level and say this is misleading, untrue and false ads. the reason he is doing this is because he is trying to hide the sorry record on creating jobs, controlling spending, reducing the deficit.

they have to raise it up. they can't take the bait and fall in the mud with president obama because at the end of the day, if this is a battle between two sort of mud slingers, neither one of them looking for people to go with the guy who is already president. >> bret: do you agree? >> care to be cautious candidacys always don't do very well. romney is a care to be cautious candidate. they are running a care to be cautious campaign. it's not going to work. i think they have to get proactive and get aggressive. start defending or deflecting the attacks better than they have been doing. >> bret: gentlemen, see you in a couple of weeks. thank you as always. this just in tonight. federal officials will allow several states to have access to an immigration data base in order to get noncitizens off their voter roles. last week, they told florida it could check their voter list against the file. they said the government is making the same offer to other states who requested.

treasury department employee looking for ladies of the evening during his day job. and you paid for it. that's next. in the grapevine. [ male announ] this is our beach. ♪ this is our pool. ♪ our fireworks. ♪ and our slip and slide. you have your idea of summer fun, and we have ours. now during the summer event get an exceptionally engineered mercedes-benz for an exceptional price. but hurry, this offer ends july 31st. here at the hutchison household. but one dark stormy evening... there were two things i could tell: she needed a good meal and a good family. so we gave her what our other cats love, purina cat chow complete. it's the best because it has something for all of our cats! and after a couple of weeks she was healthy, happy,

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st $14.99. start with soup, salad ancheddar bay biscuits then choose one of 7 entrees plus dessert! four perfect courses, just $14.99. come into red lobster and sea food differently. >> bret: now fresh pickings from the political grapevine. it appears a federal employee on your dime was looking for nighttime companionship during his work day. a government watchdog group released documents indicating now retired treasury department veteran used government computers to

contact and meet prostitutes. the report found another treasury employee accepted gifts from bankers he was regulating. official tells fox, "treasury has a strong ethics policy that we expect all of our employees to follow. the overwhelming majority of them do. with any large organization, issues of misconduct occasionally rise. when that happens in treasury, we act decisively to address them." eric holder has spoken out about voter i.d. law comparing them to poll taxes from the post slavery era, but the justice department has not spoken up about the voting rights irights in kwame whereri. they are excluding nonvoteives voting in upcoming referendum so 63% of the island residents are unable to vote. local journalists did not have a chance to question holder on the matter. the justice department did not respond to our comment.

australian olympics russell and laura mark claim discrimination for being heterosexual couple. they are not being allowed to stay together in london olympic village. they contend it's common practice for gay couples to room together at the olympics. official with the games denies any discrimination and says it's a matter of accommodating all the athletes in the village. it may soon be more expensive to buy online. those of you who shop a lot on the internet probably love it because you don't pay state sales tax. correspondent shannon bream is here tonight to tell us it appears to be changing. what is behind this? >> brick and mortar retailers have no choice. if you show up, they have to collect the applicable state sales tax to make sure the state gets its cut. in many cases, online retailers don't collect state sales taxes regardless where the items are bought or shipped. bipartisan group of senators say it could change in order to level the playing field for

traditional retailers. >> they lose business when customers walk in the store look around, maybe try on clothing and shoes just to get fited just right. write down a few numbers and walk out the door and order the product over the internet. >> it is often a lot cheaper. the marketplace fairness act working its way through the senate would give states the right to require online retailers to collect sales taxes on items delivered in that particular state. number of republican governors signaled they are now on board with this idea. including new jersey chris christie who hammered out a deal with one of the world's largest online retailer, amazon.com. if they require online retail torres collect the state sales taxes, it could generate $23 billion in revenue. at a time when federal money is drying up. bret? >> bret: we'll follow it. thank you. republicans charge that the obama administration and democrats are lining up against business. the fox all-stars on what could be a risky strategy for

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unless republicans end their commitment to protecting the rich above all else, our country is going to have to face the consequences of republicans instran intransigen. >> make no mistake. what the democrats are proposing today is avoidable high stakes game of chicken. the president made it clear over the weekend he doesn't think entrepreneurs are responsible for their own success. they owe it to the government. >> bret: the back and forth today over a democratic plan. basically a threat that perhaps $600 billion in tax hikes and spending cuths could take place january 1 of next year. if republicans don't negotiate on raising taxes for the high earners. you heard the senate minority

worker mitch mcconnell refer to something that president said over the weekend. this raised so many eyebrows. >> if you have been successful, you didn't get there on your own. if you were successful, somebody along the line gave you some help. there was a great teacher somewhere in your life. somebody helped to create this unbelievable american system that we have that allowed you to thrive. somebody invested in roads and bridges. if you got a business, you didn't build that. somebody else made that happen. the internet didn't get invented on its own. government research created the internet and then all the companies could make money off the internet. >> bret: president obama in virginia. bring in the panel. jonah goldberg, at large editor of national review online. a.b. stoddard associate editor of the hill. and syndicated columnist charles krauthammer. charles, start with the last

statement. >> spoken bay man who never created or ran so much as a candy store. it's completely a straw man argument as if conservatives and the republicans are arguing to disbeen a the fire department and the police department to do it individually on our own. the idea that infrastructure is necessary and good, is as old as the republic. it's older than that. the romans, via opia. it wasn't exactly a new idea. the question is what do you do with the money once you build the infrastructure? you heard obama talk about the moon shot. this is not on that clip but in that speech. he went through a list of the great achievements that the government has done. moon shot. obama shut down the moon program, manned space program so today we have to outsource our access to space for any american astronaut that wants to go to the space station we have to pay russian dollars 15 million a shot. he spoke about the invention of the internet he neglected to say was the work of al gore.

in fact, it wasn't the government that invented in general, it was the defense department. part of the government and what has obama done? sprinkled billions of dollars on all the other departments in government. he shrunk the defense department and looking at draconian cuts. this is a man that spent $1 trillion and left not a residue. he could have for example done something about the electric grid. he did nothing on that. instead, he sprinkled the money on crony, pie in the sky fetishes like solar panels and electric cars, which is the future but it ain't here and it won't happen now. money wasted. water on the sand. he did not leave behind residue on all that. but speaks of about the infrastructure. all of us want infrastructure, but real infrastructure. leave the rest of life to the private individual and the entrepreneur. >> bret: you fired up about this one. >> occasionally. occasionally obama gets me somewhat revved. he did it on the weekend

again. i now have the rest of the week to recover. >> bret: a.b., what about this -- >> i'll yield the balance of my time. >> i have a lot more to say. >> i know you do. i think people were probably with him on the great teacher and on the bridges and the roads. but to say you build a bids, you didn't build it. whatever it is, you can't take credit for it. you didn't make it successful is a mistake. it's making of an ad. you could combine it with the private sector doing fine. it's a very, it's a big political error to say that. it's probably a good setup for mitt romney to make the case that this is the defining argument that president obama truly believed that without government there really won't be a private sector, there won't be an economic recovery without a leg up and an arm up for everybody along the way. >> bret: jonah? >> i'm largely with charles on this one.

there are so many fallacys crammed in to this, it's a rhetorical clown car. it's simultaneously benal and outrageous. everybody believes in infrastructure and roads. the outrageous part is -- this is consistent with things that obama said in the past. social justice division of the economy. he believe believes that governs the other word for all the things we do together, which is ludicrous. one person has a problem, we all have a problem, which is crazy. you should come to my house and fix my screen door. but it's vision that he has about the role of government that government soon gets into everything. that is why the life with julia website from a few months ago was so creepy. a fairly holistic view that government needs to be involved in everything and no man's accomplishment is on its own. >> bret: on the politics, today, senator patty murray, not just any senator. number four in the senate. heads up the dscc.

she said the democrats are ready to hold the line if republicans don't raise taxes for top earners they could get to january 1 and say guess what? all the bush tax cuts are going to expire. >> i love how hostage taking is now allowed. a year ago it was outrageous for the republicans to hold america hostage for more spending cuths but now it's perfectly fine for democrats to hold america and the economy hostage to get more tax increases. it's an interesting political decision and i think it will be politically difficult for democrats to defend the idea it's worth risking throwing the economy over the cliff to raise taxes. >> bret: a.b., how does it play with republicans? if they get past january 1 and the bush tax cuts expire, and the economy takes a hit, how does that play? patty murray suggested that the republicans could then vote on a retroactive tax cut and be out of their pledge with grover norquist and the rest. >> this is really extreme

campaign rhetoric that the democrats are using. it's not, it's really out of place. you could already talk to pentagon planners about the coming cuts that they are facing. and businesses around the country about how scared they are of this there are 8 trillion fiscal cliff at the end of the year. unfortunately, both parties are to blame about the fiscal cliff. you heard me say it before. the democrats, no one is taking a serious line on anything they would really do, because even if obama wins re-election. patty murray and others suspect he, too, will reinstate the tax cuts. but the republicans voted for the sequester from the draconian military cuts. now they are saying they are unacceptable. but at the same time, they are not making sincere effort, serious effort to make sure that the compromise to get the military planners right now preparing for the layoffs and other cuts.

ill's on both sides. we have to wait nil november 7 for the work. >> bret: this is about positioning before november and semantics. >> this is not real. if i could say on the defense cuts, it's -- you would expect the president commander in chief should lead the way on the defense spending to prevent sequestration. on the issue of the bluff it's not going to happen. two things happen on election day. obama wins. if he wins, they won't take the economy over a cliff. if obama loses, they know after 20 of january, republicans can retroactively undo everything. the bluff is a bluff. it's empty. >> bret: people are e-mailing in to say al gore did not invent the internet. >> well, then, i was misinformed. >> bret: next up. romney camp says the president is a crony capitalist. white house pushing back.

be governor romney's experience has been investing in what were called the pioneers of the business of outsourcing. now he wants to get more tax breaks to companies that are shipping jobs overseas. >> the best offense is to look at the president's record. i think the american people have tired of the attacks, misdirected as they are. one after another has been shown by independent fact-checkers to be dishonest and false. campaign on falsehood and dishonesty does not have long legs. >> bret: after many danes of a bain -- after many day of a

bain attack of where romney used to work, now they're on the offense they say, charging that president obama engaged in cronyism, rewarding bundlers, donors and other supporters with stimulus funds and contracts and jobs. back and forth today. back with the panel. jonah, how is this playing? is this turning attention at all from the obama effort? >> i don't think it's a big issue among actual voters. this is a silly controversy. a really silly controversy. there is a lot of people, movement conservatives and people insiders in washington politics who can't understand how romney is let it get this messed up. how he, you know, got in a position where he is having to defend his record on bain. the guy has been running for office for a very long time. so it's eroding a sense of confidence in him as a candidate, i think it hurts him probably more among the

sort of insiders than the country at large. >> bret: a.b., the bain attack as we said many times, fact-checkers found big holes in them. some of them are just not true straight out. today, the president cited a report by an economist at reed college, professor there. saying that mitt romney's tax plan would create $800,000 jobs in foreign -- 800,000 jobs in foreign countries. that professor is an obama donor and a big democratic supporter, apparently. what about this? how does truth play? is there a backlash? >> everybody always has a study to cite about what, you know, how advantageous to american jobs romney's economic plan would be or how many jobs it will ship -- overwill sight a study. my opinion is that the outsourcing argument doesn't really matter.

my opinion is that president obama is staying on offense on the tax returns. his people, not himself, at the microphone, but his people in the top democrats and they do that because if they can just open up some kind of question about whether or not you can trust mitt romney and continues to be so secretive, that that will be successful an damaging to romney. conservatives are worried about that. that is why they are coming out on record to say release the dumb tax returns. when you don't release it, it looks like you have something to hide. let's recall every day we talk about romney is a choice election. that's what obama wants. every day we talk about the president that is referendum and that's what romney needs. >> bret: charles? >> truth and falsehood. truth doesn't have a place in this election. obama starts with the attack on the outsourcing. shown to be false. if there was any it happened after romney left bain. so obama people return with a second falsehood that romney

was running bain until 2002. all the evidence is he was not. by there is a point to the soutousing argument. it plays to the fear of the other. the irony is obama is playing to this fear. when he is the one who pointed out in 2008 how that is a result of the bitterness. remember what you said in san francisco. people not doing well, middle america, cling to god and guns, and fear of the other. he is exploiting that. fear of the other. it doesn't always work. john mcconnelly attempted in the 1980 election said he hiked tariffs on the japanese and they could watch theirt on . sometimes it works. obama thinks he's got something here as if it's the cause of the economic difficulty, but he blames it on the other. he is succeeding. >> bret: ten seconds down the row. is romney on the offense now?

>> no. he is still playing defense. >> defense. >> punching from a defensive crouch. >> that is it for the panel. stay tuned for more speculation on mitt romney's potential running mate. man: there's a cattle guard, take a right.

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>> bret: finally tonight. there is a lot of speculation about mitt romney's running mate choice, when will it happen? who will it be? paul ryan, tom portman, tim pawlenty. marco rubio, chris christie or someone else? one late night show apparently found out that the romney campaign is testing some of the candidates with specific ads in specific places. this is what they found. ♪ ♪ ♪ rice and romney, the new american treat. ♪ rice and romney, the combo can't be beat. >> she is